Robinhood lawsuit seeks to shift event contracts from state gambling laws to federal oversight

Robinhood users in Washington state can no longer access event-based contracts after state regulators restricted the products. The restriction stems from Washington's classification of these products as wagering on uncertain outcomes, which fits the state's definition of gambling.

Robinhood filed a federal lawsuit on March 30, 2026, against the state attorney general and the Washington State Gambling Commission to challenge the block. The company argues that event contracts are financial instruments structured as derivatives, which would place them under federal oversight via the Commodity Futures Trading Commission.

This legal strategy follows a recent ruling by the US Court of Appeals for the Third Circuit, which held that the Commodity Exchange Act preempts state gambling laws for certain event contracts. Robinhood is seeking a similar outcome in the Pacific Northwest to avoid a fragmented regulatory model where products are banned state-by-state. A victory would establish a unified federal framework for prediction markets.